Get ready for a major shake-up in Vietnam's accounting landscape! Circular 99 is set to revolutionize the country's financial reporting system, bringing it in line with international standards. But here's where it gets controversial: this new regime is not just about compliance, it's a strategic move towards a more transparent and efficient corporate accounting system.
Effective from January 1, 2026, Circular 99 replaces its predecessor, Circular 200, and introduces a unified legal framework for corporate accounting. This consolidation simplifies the process for enterprises, making it easier to reference and apply the rules.
And this is the part most people miss: Circular 99 goes beyond mere alignment with IFRS. It emphasizes corporate governance and internal control, ensuring that economic transactions are managed within a robust legal and regulatory framework. Enterprises are now responsible for developing governance policies and implementing internal control measures to clearly define rights, obligations, and responsibilities.
One of the most notable changes is the flexibility granted to businesses regarding their functional currency. Enterprises can now choose to use either the Vietnamese Dong (VND) or another functional foreign currency for their bookkeeping. This move provides greater accuracy in financial reporting for FDI enterprises, import-export companies, and logistics firms, while still adhering to Vietnamese regulations.
The circular also introduces amendments to the chart of accounts, allowing enterprises to customize account names, codes, and structures to suit their unique business characteristics and management requirements. However, these modifications must adhere to certain principles, ensuring proper transaction classification and maintaining the integrity of financial statements.
In terms of financial statements, Circular 99 replaces the traditional Balance Sheet with the Statement of Financial Position, bringing Vietnam's reporting framework closer to international accounting standards. Enterprises are now required to prepare complete annual financial statements as specified in Appendix IV of Circular 99, with the option to prepare interim statements as per applicable laws or management requirements.
The new regulations also mandate that all FDI enterprises have their annual financial statements audited by a Vietnamese independent audit firm. These statements, including the audited ones, must be submitted to local authorities within 90 days after the fiscal year-end.
As for accounting software, enterprises are now required to use software that complies with accounting and tax laws, ensuring accuracy, transparency, and data security. The software must also be capable of integrating with related systems and being updated to reflect changes in regulations.
Circular 99 sets the stage for Vietnam's transition towards a new accounting standards system, with the Ministry of Finance (MoF) planning to revise the Accounting Law and develop a new set of Vietnamese Financial Reporting Standards (VFRS). These standards are designed to converge with and align closely with IFRS, bringing about substantive changes in the corporate accounting regime.
For enterprises operating in Vietnam, now is the time to prepare for this shift. Assess the gaps between your current accounting practices and the forthcoming VFRS/IFRS-aligned framework. Review your accounting policies, update internal systems, and evaluate the impact on financial reporting, tax obligations, and cross-border transactions. Consider staff training, upgrading accounting software, and engaging advisors to ensure a smooth transition.
Early preparation is key to avoiding implementation risks and staying aligned with Vietnam's evolving financial reporting landscape. Don't get left behind - embrace the changes and stay ahead of the curve!
